FINMA strengthens UBS supervision and demands more powers
Published: Wednesday, Mar 20th 2024, 11:02
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Following the CS crisis, the Swiss Financial Market Supervisory Authority FINMA continues to call for a stronger legal basis and additional powers for its activities. Following the takeover of Credit Suisse by UBS, it has strengthened its supervision of the big banks.
Finma achieved its statutory mandate to protect the functioning of the financial markets and financial market clients last year, the supervisory authority said in a statement on Wednesday at its annual media conference in Bern. It had analyzed the CS crisis in detail and learned lessons from it. It is now making "targeted" adjustments to its supervision.
One of the new instruments the authority would like to see is the clear assignment of responsibilities for individual transactions to certain bank managers ("senior managers regime"). However, it also wants the authority to impose fines. In addition, FINMA wants to be allowed to communicate more actively about its activities. Switzerland now has the power to shape its financial center of the future, said Marlene Amstad, Chairwoman of the Board of Directors.
UBS risks in focus
Following the takeover of CS by UBS, Finma has merged the existing teams and expanded its supervision of the big banks. A total of forty on-site inspections are planned at UBS in Switzerland and abroad, according to Thomas Hirschi, Head of the Banks division. Two "extensive stress tests" are also to be carried out this year.
According to Finma, the focus is now on the risks arising from the integration process and operational stability due to the merger with CS. The supervisory authority is also focusing on the combined bank's capital and liquidity planning as well as its business conduct. In addition, the stabilization and emergency planning of the combined bank will be critically examined.
On-site inspections 2023
In 2023, FINMA carried out a total of 732 investigations in the area of law enforcement, compared to 850 in the previous year, as can be seen in the annual report. It also concluded 27 proceedings against companies and natural persons. There were 39 in the previous year, in which it prevailed in court: In all concluded proceedings, the courts supported FINMA, according to the press release.
Last year, FINMA carried out a total of 96 on-site inspections at Swiss banks after 113 inspections in the previous year. The above-average number in 2022 was due to unplanned on-site inspections in the area of sanctions. In addition, FINMA canceled some on-site inspections planned for 2023 following the takeover of CS by UBS.
Registration of insurance intermediaries
Finma also carried out on-site inspections at insurance companies. There were 51 in 2023 after 50 in the previous year. The focus was on the areas of life insurance, money laundering at insurance groups with life insurance business and cyber risks.
Finma was also able to conclude a total of 1248 new registration applications from insurance intermediaries. In accordance with the revised provisions of the Insurance Supervision Act, this professional group is now licensed and supervised by FINMA.
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